Offshore Tax Havens Uncovered…Do You Know Your Legal Options?Offshore Account Update
Posted on July 31, 2017 | Share
If you have funds in an offshore bank account, keeping your investments private may have been one of the goals of opening the offshore account. Unfortunately, in recent years, it has become increasingly difficult to keep your personal account information from falling into the hands of the IRS or otherwise being outed.
The IRS has been enticing banks to participate in the Swiss Bank Program, which allows those banks to avoid criminal prosecution for their role in tax evasion by paying a penalty and revealing information on accountholders. There was also the Panama Papers, which was the release of 11.5 million leaked files from a prominent Panama law firm that revealed secret ownership of financial accounts in 21 offshore jurisdictions.
If your information is publicly released or is revealed to the IRS, you need to know what your options are for dealing with the fact that your tax haven has now been outed. A Boston tax attorney can help you to determine your best response to the revelation of your offshore account. You should contact an attorney if you have concerns that your account has been revealed when you're not in full compliance with U.S. tax law.
What Should You Do If Your Offshore Bank Information is Revealed?
Keeping money offshore isn't a violation of tax laws, provided you report the account, pay taxes on all income, and file an annual Report of Foreign Bank and Financial Accounts. Unfortunately, many people don't file FBARs because they don't know they have to or for a variety of other reasons. Many offshore investors also don't let the IRS know about their investments and don't pay taxes on gains. It is in these situations, where you have not complied with tax law, that you face problems if your offshore account is outed.
Since the revelation of your off-shore account could potentially result in the IRS taking action against you, you should contact an experienced attorney right away. Your attorney can work with you to identify the best way to respond to avoid criminal prosecution and protect your wealth.
For many people with offshore funds that could be imminently discovered, participation in the Offshore Voluntary Disclosure Program makes sense. While this program still means you'll have to pay penalties, the penalties can be lower than if the IRS investigated you on its own and found you in violation of the law. Participation in OVDP also means you can get amnesty from criminal prosecution.
If you are already being actively investigated by the IRS, it will be too late for you to participate in OVDP. This is why it is so important to take swift action if you fear that your offshore account information has been publicly revealed and/or has come to the attention of the IRS. Contact Boston tax attorney Kevin Thorn as soon as possible to find out what your best course of action is if you are worried that the outing of your offshore account could result in the IRS coming after you.